April Newsline: New Orleans reinstates sewer/water program; Keystone Pipeline grabs; raising rates to fund infrastructure and more

April 2010 Vol. 65 No. 4

Higher water rates could fund infrastructure projects
City council officials in Houston are in talks to look for a way to increase in its water rates to help fund water and sewer projects. The increased rates would prop up the finances of the Combined Utility System fund, which is used to not only rehabilitate water and sewer lines, but also to pay for drainage projects.

Mayor Annise Parker said she would consider a water rate increase to keep pace with related costs.

The increase could come all at once or be spread over several years. Under the former option, one estimate suggested as much as a 14 percent rate hike would be necessary to sustain the system and the infrastructure projects it pays for. That would equate to about a $3-a-month increase for the average residential water user.

Under former Mayor Bill White, the city's water/sewer system was on the brink of insolvency shortly after he took office in 2004. City Council refinanced its debt and set in motion automated increases based on inflation and, last year, population growth. Those increases no longer are adequate to keep pace with the upkeep of the system and the infrastructure projects the city needs to mitigate flooding, city officials said.

Parker said the decision about rate increases will revolve around how many capital improvement projects City Council members decide the city needs. A council committee and a group of transition advisers separately are working on the question of how to fund drainage and flooding projects.

Whistleblower to sue PVC pipe manufacturer
A three-year old whistleblower suit unsealed in a federal district court in Los Angeles on Feb. 8 claims that J-M Manufacturing, now trading as JM Eagle, and its former parent company, Formosa Plastics Corp. (USA), supplied water and sewer systems with PVC pipes that JM knew were substandard. It asserts that up to 50 percent of the pipe produced between 1997 and 2005 is prone to breakage and leaking at pressure loads below the labeled rating. The pipe is used in water and sewer systems that, for the most part, are owned and operated by municipalities and public water districts.

Nevada, Virginia, Delaware, Tennessee, San Diego, Sacramento, San Jose, the Los Angeles Department of Water and Power and 39 other California municipalities and water districts have joined the whistleblower lawsuit seeking millions of dollars in damages.